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Holds off 2021 Highs but Some GBP Buoyancy Seen.

GBP
MNI (London)
  • Corrective pullback away from Monday's high of $1.3704(2021 high) extended on to $1.3533 Thursday though move yesterday was slower than the corrective pullback in EUR/USD.
  • Rising UST yields, along with position adjustments ahead of today's US Employment Report release (and a calming in the political situation in the US) led to the USD making general gains, the move squeezing out some of the weaker USD shorts.
  • Longer term short USD positions remain in favour, market will watch Biden Govt's proposals for further fiscal stimulus.
  • GBP/USD recovered to $1.3578, closing the day around $1.3566.
  • Further USD demand in early Asia, led by USD/JPY as it edged to Y104.00, saw GBP/USD drop to $1.3539(holding inside Thursday's low) recovering through the balance of the session to $1.3576 into Europe.
  • A light domestic data calendar in the UK. Main attention will be on the US Employment Report (NFP median 50k vs 245k last) at 1330GMT. US political headlines in focus.
  • Support $1.3535/30, a break to expose $1.3500. Resistance $1.3570/80, $1.3600, $1.3633.
  • UK remains in COVID lockdown. Hopes for a rapid vaccine roll out to counter.
  • MNI Techs: GBPUSD is still trading below recent highs. The outlook is bullish though following the recent clearance of key resistance at 1.3624, Dec 17 high. The break reinforces a positive trend structure and opens 1.3712 next, Mar 1, 2018 low. Moving average studies remain in bull mode, highlighting the positive trend structure. On the downside, firm support lies at 1.3430, Dec 28 low and 1.3304, Dec 22 low. Initial support is at 1.3526, the 20-day EMA.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com

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